ISSN: 2222-6990
Open access
Foods and beverages are a sub-sector of the consumer and product services industry, with the biggest consumer demand among the industries listed on the Bursa Malaysia. The significant performance factors of Shariah Compliance and Non-Shariah Compliance companies in Malaysia's food and beverage sector were uncovered in this study. The study spans the years 2008 to 2017, with 350 observations from Shariah-compliant and non-compliant firms. Utilizing the Random Effect Model (REM), the data show that for Shariah Compliance enterprises, quick ratio and total asset have a positive link with return on asset, however for Non-Compliance enterprises, only total asset has a positive association with profitability and the others are adversely related. Except for total assets, the results of random effect model regression demonstrated that all independent factors, including quick ratio, debt ratio, tax rate, and tangibility, have a substantial impact on the ROA of Shariah compliance enterprises. Nonetheless, there are three independent variables that are significant for Non Shariah Compliance in terms of return on asset: debt ratio, tax rate, and tangibility. The profitability of non-Shariah compliant enterprises is unaffected by log assets or the quick ratio.
Ahmad, W. (2017). Pecking order theory: evidence from Malaysia and Thailand food and beverages industry. Jurnal Intelek, 12(1), 85–91.
Alarussi, A. S., & Alhaderi, S. M. (2018). Factors affecting profitability in Malaysia. Journal of Economic Studies, 45(3), 442–458. https://doi.org/10.1108/JES-05-2017-0124
Bashir, Z., Abbas, A., Manzoor, S., & Akram, M. N. (2013). Empirical investigation of the factors affecting firm’s performance: A study based on food sector of Pakistan. International SAMANM Journal of Finance and Accounting, 1(2), 11-23.
Bhutta, N. T., & Hasan, A. (2013). Impact of firm specific factors on profitability of firms in food sector.
Cheng, Y., & Huang, Y. (2017). Determinants of Bank Profitability: Evidence From US.
Dioha, C., Mohammed, N. A., & Okpanachi, J. (2018). Effect of firm characteristics on profitability of listed consumer goods companies in Nigeria.
Do?an, M. (2013). Does firm size affect the firm profitability? Evidence from Turkey. Research Journal of Finance and Accounting, 4(4), 53-59.
Eitokpa, O. H. (2015). Determinants of financial performance of listed foods and beverages companies in Nigeria (Doctoral dissertation, Doctoral Dissertation).
Ismail, N., & Subramaniam, A. (2017). Factors affecting performance of consumer products companies in Malaysia. Journal of Global Business and Social Entrepreneurship (GBSE), 3(8).
Kraidi, A. A. (2015). A Comparative Study of Profitability Indicators of Commercial Banks in Turkey and the UAE. August.
Lusyana, D., and Sherif, M. (2017). Shariahcompliant investments and stock returns: evidence from the Indonesian stock market. Journal of Islamic Accounting and Business Research, 8 (2), 143-160
McGowan, Jr., C. B., & Muhammad, J. (2010). The Theoretical Impact Of The Listing Of Syariah-Approved Stocks On Stock Price And Trading Volume. International Business & Economics Research Journal (IBER), 9(3), 11–20. https://doi.org/10.19030/iber.v9i3.532
Yusoff, M. H. (2017). The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia (Doctoral dissertation, Universiti Tun Hussein Onn Malaysia).
Mokhtar, M. Z. (2006). An Evaluation of the factors affecting corporate performance of Malaysia listed companies. PhD Thesis, Dept. of Accounting and Finance, 44(0), 6.
Phan, K. C. (2013, December). Factors affecting profitability (Case of consumer products companies of Thailand). In International Conference on Innovations in Engineering and Technology (Vol. 25, No. 26, pp. 163-166).
Rashid, N., Ismail, W. N. S. W., Abd Rahman, M. S., & Afthanorhan, A. (2018). Conceptual Analysis on Performance Measurement Used in SMEs Research: The Effectiveness of Firm’s Overall Performance. International Journal of Academic Research in Business and Social Sciences, 8(11), 1401-1412.
Raza, A., Ansari, R. H., & Younis, M. U. (2012). Does the loan loss provision profitability in case of Pakistan?? Asian Economic and Financial Review, 2(7), 772–783.
Sathyamoorthi, C. R., Christian, J. M., Mogotsinyana, M., & Selinkie, P. (2018). The Impact of Corporate Governance on Working Capital Management Efficiency: Evidence from the Listed Companies in the Consumer Services Sector in Botswana. International Journal of Economics and Finance, 10(12), 135-149.
Shahar, W. S. S. B., & Shahar, W. S. S. B. (2015, May). Impact of firm leverage to performance: evidence from Shariah and non-Shariah compliant companies in Malaysia. In International Conference on Economics and Banking (iceb-15). Atlantis Press.
Tailab, M. (2014). The effect of capital structure on profitability of energy American firms. International Journal of Business and Management Invention, 3(12).
Taslim, M. (2017). To Determinants Of A Firm's Profitability In Food And Beverage Industry: An Empirical Analysis On Oriental Food Industry Holding Berhad.
Ting, I. W. K., Kweh, Q. L., & Chan, Y. C. (2014). Does organizational growth contribute to profitability? Evidence from Malaysian public listed companies. International Journal of Business and Society, 15(2), 267–276.
Umi, S. Z., Noraina, M. (2017). The Determinants of Firms Profitability in Consumer Product Sector. The European Proceedings of Social & Behaviours Science, 661-669.
In-Text Citation: (Affandi et al., 2021)
To Cite this Article: Affandi, S., Zainuddin, N. I., & Asari, F. F. A. H. (2021). Performance of Shariah and Non Shariah Compliance F&B Firms in Malaysia: Is there any Difference? International Journal of Academic Research in Business and Social Sciences, 11(18), 1–11.
Copyright: © 2021 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode